More Confident Ford to Realize Tax-related Gain

Ford Motor Co. will realize a one-time tax related gain that could boost reported net income by up to about $13 billion when it details fourth-quarter results, the automaker's chief financial officer said on Monday.

The No. 2 U.S. automaker said earlier this year that it would make the accounting move based on a more positive view of its earning prospects.

Ford said in a November filing with U.S. securities regulators that it was likely to reverse a valuation allowance it made against deferred tax assets in 2006 when the automaker was on the cusp of three years of operating losses.

"You can say we're on track" Ford Chief Financial Officer Lewis Booth said on Monday on the sidelines of the Detroit auto show.

Booth said Ford would provide more detail on the tax-related accounting change when it releases fourth-quarter earnings likely late this month.

"It's a good story because it indicates that we feel confident about the future of our business, that we will be able to use up those tax assets and begin paying cash taxes as well," Booth told Reuters.

Ford has carried a valuation allowance of $15.6 billion against its deferred tax assets. By reducing that valuation allowing, Ford could bolster its reported net income by between $10 billion and $13 billion, corporate tax consultant Robert Willens has estimated.

Booth said the effect on Ford's reported income would be in "that sort of ballpark."

Most Wall Street analysts understand and anticipate Ford's accounting change and will make adjustments to earnings per share estimates accordingly, Booth said.